Fidelity predicts there will be more central banks and sovereign nations that acquire bitcoin this year. “There is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” the firm explained.
Fidelity’s Crypto Predictions
Fidelity Digital Assets (a subsidiary of Fidelity Investments) published an earlier in the month a report about crypto trends and potential future impacts. One of the topics discussed is adoption of cryptocurrency in sovereign countries.
“This past year saw some major moves by world governments with regards to digital assets,” Fidelity described. This report discusses both countries such as China, which have prohibited cryptocurrency, and El Salvador, that made BTC legal.
“We think the two developments observed this year couldn’t be more opposed. Time will certainly tell which path is more successful,” the report authors opined. But they did point out:
It will not be easy to ban all substances. However, it will cause significant wealth loss and other opportunities.
The authors continued, “We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” elaborating:
Even if they don’t believe in bitcoin adoption or the investment thesis, other countries will have to purchase it as insurance.
Fidelity clarified, “In other words, a small cost can be paid today as a hedge compared to a potentially much larger cost years in the future.” The investment firm concluded:
We therefore wouldn’t be surprised to see other sovereign nation states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition.
El Salvador’s president, Nayib Bukele, also predicted last week that two more sovereign nations will adopt bitcoin as legal tender this year. Nigel Green is the CEO of Devere Group and is more optimistic. He predicts that BTC will be adopted by three other countries this year.
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